Highlights of the Singpost-Alibaba Collaboration

If you haven't already know, Singpost announced a trading halt yesterday in the afternoon, pertaining to Alibaba's investment in it. The news can be found here.

Instead of boring you with the nitty-gritty details; let's take a look at the main highlights:

1. Alibaba Investment Limited will invest S$312.5 million to purchase 30 million existing ordinary shares held in treasury by SingPost and 190.096 million new ordinary shares and take a 10.35% stake in SingPost upon completion.
   
2. Both parties are forming a joint venture (JV) to leverage on each other's strengths and distribution networks/technology discuss.
   
3. Currently, SingPost’s e-commerce and related businesses account for about 26% of its total revenue. The CEO has said that he understands that their core domestic business [mailing biz] continues to be under pressure from rapidly declining domestic traditional mail volumes.
   Thus, he is looking at driving growth through Singpost's regional e-commerce logistics and strengthening it to be a regional revenue stream.
   
4. Funds from this investment provide SingPost with financial flexibility to significantly scale up its e-commerce logistics business and build new capabilities as they are poised for growth in the region.

My Opinion

It seems that everything is oiled into place - CEO with the right focus on e-commerce, a strong backing from Alibaba and plenty of ka-ching to expand quickly. 

While Singpost is selling for a relatively high P/E ratio of 23.08 (from bloomberg as at 28 May); if it can turn its e-commerce biz from 26% of its revenue to 50% - it will mark a very strong growth rate like seen from Raffles Medical (growing at P/E 20+ with strong earnings growth over past years) 

Furthermore, it also offers a 3.79% dividend yield, so it can also provide some decent cash-flow for an investor even if it is a long wait for capital gains.

What do you think about this deal for Singpost? Let me know by leaving a comment under my facebook page @ www.facebook.com/kissinvesting. Thanks & HUAT AH!

How to buy thailand undervalued stocks

Unrest in Thailand

The political turmoil in Thailand shows no pause or any sort. In fact, this 12^th military coup in the history of the country is making things worse for the country’s economy.

Thailand has been facing unrest for over the past six months and the Thai Baht has come down 2% compared to US dollar after the coup news.

Nevertheless, as investors dig through Thailand's history of coups, they will realise that the stock markets usually rebound sharply once things are stabilized.

Finding Undervalued Thai Stocks

So out of curiosity, I decided to run a stock filter based on the following:

1. Exchange is SET [Stock exchange of Thailand]
2. Return On Equity (FY) is >10 (%)
3. Dividend Yield is 5 - 10 (%)
4. P/E excluding extraordinary items (Q) is <10

Screenshot of Stocks which match the 4 filters

The rationale behind these screens? I want the stocks to be cheap and performing well in terms of ROE. One filter Warren Buffett tends to look for is "Has the company performed consistently well?" ROE is also referred to as "stockholder's return on investment." It reveals the rate at which shareholders are earning income on their shares.

Lastly, no one will know when the coup will end. Barring any unforeseen circumstances, I wish to look for a good dividend yield to help me tide over the uncertainty ahead. Of course, consistent dividend payouts and free cash flow will be important in judging if the yield can be sustained.


School of Thought

While it may not be comprehensive enough to capture other quality stocks as well, I believe a stock screening is definitely better than nothing. Moreover, there are still numerous stocks which we can zoom into their qualitative aspects.

In my next few posts, I will be touching on those Thailand stocks (if any) that possess one or more qualities such as great growth potential, high profit margins, margin of safety and more!

Like my post to receive more regular updates like this at www.facebook.com/kissinvesting. Thanks & HUAT AH!

Why SMRT share price shoot up/increase 44.6%

SMRT had a huge run-up in its stock price - whopping 44.6% gain in less than 1 month from 23 April where it laid stagnant at S$1.02 for quite some time. This is despite the fact that there are no significant developments in the company!

Nevertheless, many market observers would be lamenting now that they missed such a market darling. Will the up trend continues or will it fade away? Let's take a look at why its stock price soar so high in the first place...

Proposal to sell hard assets to Singapore's govt

After numerous train breakdowns, one of the key concerns is the improving and refurbishing of its railway lines which cost tons lots of money, driving its profits down due to high costs. The potential sale would turn SMRT into an asset-light operator (For more information, you can read the news article here) where: 

• it only charges a cost-plus pricing for operating the lines (a d*mn good deal i would say)
• The high operating costs are now borne by the government, in turn, by the tax-payers. 
• Don't forget about its lucrative rental and advertising side-lines where the opening of Sports Hub will lead to another set of good results.

Over the long run, if the framework is approved, it does help to validate the surge in share price. However, as of 20 May 2014, SMRT is selling at 36.88 times P/E ratio, 2.68 times of the STI multiple. The earnings will have to increase by 100% or 2 times in order for the P/E ratio to be in a more acceptable range of 18+.

Lastly, such a major decision may take some time to materalize and even more time will be required to turn it into profits. People should be careful of buying in a frenzy and getting stuck at the top for a long time in order for fundamentals to catch up to the euphoria.

3 reasons to bet on Croesus Retail Trust

Gone were the days where Croesus Retail Trust lingered at below its IPO price of S$0.93 around one year ago. It has been on an upswing recently, up almost 8% in a month. This can be due to the positive news where it still has the first right of refusal to 2 additional malls in Japan.

Other than that, there are 3 compelling reasons why Croesus Retail Trust is worth another look:

1. Strong Financials: Besides reporting Actual results that out-performed forecasts in 3 straight quarters, it is offering a dividend yield of 7.37%.
2. Right Place, Right Time: Croesus Retail trust properties are all situated in Japan, a country where many asset values have fallen drastically for the past decade. Nevertheless, under Abenomics, the middle income crowd seems to be getting back into shape.
3. Awards: Winning the title of "Best Small Cap Company" drives in the notion that management team is delivering a good job in steering the company to greater heights.
4. Growth Plans: Opportunities of Rental Reversions are intact. With accretive acquisitions & rental increases -> it can lead to higher distributions in the future too.

Nevertheless, investors will have to take note of the high gearing ratio (53.5% as of 31 March 2014) which seems to be more than the average REITs in the market. If you are interested about the company, you can read more here.

Hope you like my post! You can receive more regular updates by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

Learn how to Enjoy 1 for 1 movies and starbucks coffee!

If you haven't already noticed, the discounted movie tickets (using Passion card or NTUC card or any credit cards) at Cathay Cineplexes are no more for the time being until June 2014... Leaving us with the other option of regular priced tickets at S$13?!

That's seriously expensive... Inflation has made its way into the movies as well! I remember I grumbled having to pay $7 during my school days.. lol..

Meanwhile, there is a glimmer of hope where you can enjoy 1 for 1 movie tickets (I just used it to watch Spiderman 2 movies at $6.50 each)!

Now you can enjoy all these offers by just downloading the Nets Savers App and using any card that has Nets Flashpay to make payment! Share this with your frens as well!

Hope all of you can Save more $_$!

Singapore ranked 2nd in World's Economic Free Countries Index

The Index of Economic Freedom for 2014

According to the economic freedom index, Singapore is the second "free"st economy in the world behind Hong Kong. The index marked the country with a score of 89.4 which is 1.4 points ahead of last year.

This figure represents the labour and investment freedom in the country that overshadows any small monetary and business freedom decline. Singapore has been ranked as being second among 42 countries in the Asia Pacific region.

In the index’s 20 year history, Singapore has successfully surged up by 3 points owing to limited government and market openness that has advanced in the past years in double digits. 

Singapore’s competitiveness has been powered by high trade freedom levels and the regulatory efficiency that contribute largely to the ensuring of a resilient growth of the country’s economy. With a record of continuous high achievements from the past consecutive four years from 2010, it is now in 2014 that Singapore has achieved its highest ever index score.

Singapore also holds a strong minimum tolerance tradition from corruption which is institutionalized within a judicial frame work that is efficient and sustains the rule of law for this ever dynamic economy.

Economic Freedom Promotes Prosperity

As you can see from the ranking of the world by economic freedom-ness, many of the small countries are high up in the top 10. 

Perhaps thats why many countries would like the small countries like - Singapore, Switzerland, Hong Kong to shed some light on how to manage their countries!

All said, Singapore achieved S$60,410 per capita income, S$56.7 billion FDI flow, 4.6% inflation and 2% unemployment for the year 2013, a feat we Singaporeans can be proud of!

Why Investing is like Playing Dota

P.S. If you don't know what Defense of the Ancients (DotA) is...well, you're probably not reading this post.

Many people (esp girls) i think, will exclaim at this title.. What!?! How can such an important thing like investing be linked to  playing a game!

That said, i would like to state first that i am both an investor and avid dota gamer. And i thought of the similarities while waiting for the game to start... Lol.. Here goes:

#1 Begin with the End in mind

Dota: you have to take down the enemy towers..

Investing: this is really dependant on each individual (some may aim to be billionaire?) but generally it is to retire rich and have a comfortable retirement.

#2 Steps to achieve it

Dota: you farm creeps/minions (for gals who don't understand - they are little creatures that drop money) and slaughter enemy heroes to build up ur inventory; so that you are stronger than ur opponents to achieve your goal (mentioned previously).

Investing: you have to slowly build up your wealth through the power of compounding and your preferred  investment strategy. Killing heroes is like getting a bonus from multi-bagger stocks...

#3 Teamwork

Dota: No matter how great you are as a solo hero; it doesn't mean you can win against a team of five alone. Tournaments has shown that teamwork is crucial - carry, tanker and supporter.

Investing: same goes for investing.. When you dip into the investment world for the first time, many will feel overwhelmed.. (I have many friends asking me how to start, how to value or see whether stocks are good buys or not)

The key point is here: history has proven that every successful person has a mentor and why should you be different?

Find a mentor, financial adviser, stock-broker and books/seminars (yes, they are impt!) to be your team to HELP you... (Many are just there to earn ur $$ so be careful)

Conclusion

All in all, it also depends on your mindset. More often than not, people give up on Dota games when they see no hope to win right at the start.

If you bring this mentality to stocks investment, you are "doomed" (by doombringer lol!). Okay cold joke aside, investing in stocks as well as dota, are easily done; but not easy to be mastered.

There you go - the reasons why investing is like dota. There is one real big difference though, u can earn kaching $_$ by investing wisely but not dota! So, kickstart on your investment journey today!!